Correlation Between PT MNC and Mnc Investama

Can any of the company-specific risk be diversified away by investing in both PT MNC and Mnc Investama at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT MNC and Mnc Investama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT MNC Energy and Mnc Investama Tbk, you can compare the effects of market volatilities on PT MNC and Mnc Investama and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT MNC with a short position of Mnc Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT MNC and Mnc Investama.

Diversification Opportunities for PT MNC and Mnc Investama

0.1

Correlation Coefficient

PT MNC  Mnc Investama

Average diversification

The 3 months correlation between IATA and Mnc is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PT MNC Energy and Mnc Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnc Investama Tbk and PT MNC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT MNC Energy are associated (or correlated) with Mnc Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnc Investama Tbk has no effect on the direction of PT MNC i.e., PT MNC and Mnc Investama go up and down completely randomly.

Pair Corralation between PT MNC and Mnc Investama

Assuming the 90 days trading horizon PT MNC Energy is expected to generate 0.69 times more return on investment than Mnc Investama. However, PT MNC Energy is 1.46 times less risky than Mnc Investama. It trades about 0.0 of its potential returns per unit of risk. Mnc Investama Tbk is currently generating about -0.14 per unit of risk. If you would invest  5,000  in PT MNC Energy on December 29, 2024 and sell it today you would lose (100.00) from holding PT MNC Energy or give up 2.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT MNC Energy  vs.  Mnc Investama Tbk

PT MNC Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT MNC Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT MNC is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mnc Investama Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mnc Investama Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT MNC and Mnc Investama

The main advantage of trading using opposite PT MNC and Mnc Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT MNC position performs unexpectedly, Mnc Investama can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mnc Investama will offset losses from the drop in Mnc Investama's long position.

The idea behind PT MNC Energy and Mnc Investama Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.